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Monday, February 14, 2011

Mortgage interest tax deduction may be in danger

This has been on the table for sometime.  Now, it's officially being proposed.
President Obama's 2012 budget proposes an across-the-board 30% cut to itemized deductions for high-income taxpayers. This includes the mortgage interest tax deduction.
Currently, interest on a mortgage taken out to buy or improve a home can be fully deducted if the amount of the loan is less than $1 million for married couples and $500,000 for singles. Home equity loans taken out for anything else is limited to $100,000 for couples and $50,000 for singles.
 However, the National Association of Realtors is fighting it.
The National Association of Realtors, the biggest advocate for the mortgage interest tax deduction, voiced concerns when the commission first brought up the proposal in December.
"The tax deductibility of interest paid on mortgages is a powerful incentive for homeownership and has been one of the simplest provisions in the federal tax code for more than 80 years," said NAR President Ron Phipps at the time.
NAR did not immediately have a statement on this latest proposal from the administration, but a spokesman said they will when they obtain more information.
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